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A bit more on cut offCut off is the term used to describe the matching of stock, income and expenditure at the year end. The idea is to make sure that physical movements of good are reflected in the financial statements in a consitent manner.

Audit proceduresDebtors circularisations are used by auditors to check for overstatement of debtors. They will write to a sample of a company's debtors and ask them how much they show as being owed to the audited company. This will allow them to verify the level of debtors.

Cut off procedures are undertaken to ensure that transactions are accounted for correctly regarding the year end. For instance to check that a bad debt provision is adequate, auditors will analyse the receipts after the year end to see whether the debts outstanding justify the provision.

Analytical procedures are used to identify why a company has increased/decreased figures. For instance, if sales have increased a comparison with marketing could show that increased marketing has lead to increased sales.